By Raiko Shareef
NZ rates dropped by 3bps to 4bps yesterday, as the local market followed Tuesday night’s rally offshore.
The downgrade to global growth prospects highlighted in the IMF’s semi-annual report saw some pessimism seep into the NZ rates market, after provoking a bloodbath in global equities.
Global investors continue to see NZ rates as attractive for receiving, and that interest was evident in the market yesterday. The 2-year swap yield closed 3bps lower at 4.04%.
Overnight, rates markets were fairly subdued ahead of the FOMC minutes for September, due at 7am NZT.
The US 10-year Treasury yield rose by 4bps to 2.38%, after a particularly weak bond auction. But this move was pared following the Fed minutes, which were perceived as more dovish than the market had prepared for.
Today, looking through the lottery that is the Australian jobs report, there is little on the data calendar to trouble investors. Amidst the handful of central bankers speaking tonight, we’d keep our eyes on ECB President Mario Draghi, and Fed Vice-Chair Stanley Fischer.
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